July 01, 2013 Press Release
Pearson and Bertelsmann today announce the completion of the joint venture between Penguin and Random House to create Penguin Random House, the world's leading consumer publishing company.
Penguin Random House will be the first truly global publishing company with operations in the US, Canada, UK, India, South Africa, Australia, New Zealand, Spain, Mexico, Argentina, Uruguay, Colombia and Chile. The new company employs more than 10,000 people and publishes more than 15,000 new titles every year across 250 imprints. It publishes many of the world’s bestselling authors, including more than 70 Nobel Prize laureates.
Pearson and Bertelsmann believe that the combined organisation will have a stronger platform and greater resources to invest in rich content, new digital publishing models and high-growth emerging markets. The organisation will generate synergies from shared resources such as warehousing, distribution, printing and central functions. Pearson and Bertelsmann intend that the combined organisation’s level of organic investment in authors and new product models will exceed the total investment of Penguin and Random House as independent publishing houses.
The Penguin Random House board will comprise:
Bertelsmann owns 53% of the joint venture and Pearson owns 47%. The joint venture excludes Bertelsmann’s trade publishing business in Germany and Pearson retains certain exclusive rights to use the Penguin brand in education markets worldwide. In 2012, Penguin Random House had pro forma revenues of £2.6bn (€3.2bn) and operating profit of £346m (€427m). Penguin reported revenues of £1.1bn and operating profit of £98m with total assets of £1.2bn. After completion, Pearson will report its 47% share of profit after tax from the joint venture as an associate in its consolidated income statement from 1 July 2013. Pearson will report interim results on 26 July 2013 and will provide more financial information on the transaction.
As previously indicated, John Makinson is today stepping down from the Pearson board to assume his full-time responsibilities as Chairman of Penguin Random House.
John Fallon, Chief Executive of Pearson, said: “Penguin has been at the heart of Pearson for more than four decades and is deeply intertwined with our culture and operations. This combination creates a clear world leader with a strong platform for continued creative and commercial success in a rapidly-changing consumer publishing industry. This will be an excellent business and we will be active long-term partners in it.”
Thomas Rabe, Chairman and CEO of Bertelsmann, said: “With today’s launch of Penguin Random House, Bertelsmann and Pearson have set a great course for the future of the book, and book publishing – and new growth for Bertelsmann. Together, we can and will invest on a much larger scale than separately in diverse content, author development and support, the publishing talent, the entire spectrum of physical and digital book acquisitions, production, marketing, and distribution, and also in fast-growing markets of the future.”
Penguin Random House will be the first truly global publishing company with operations in the US, Canada, UK, India, South Africa, Australia, New Zealand, Spain, Mexico, Argentina, Uruguay, Colombia and Chile. The new company employs more than 10,000 people and publishes more than 15,000 new titles every year across 250 imprints. It publishes many of the world’s bestselling authors, including more than 70 Nobel Prize laureates.
Pearson and Bertelsmann believe that the combined organisation will have a stronger platform and greater resources to invest in rich content, new digital publishing models and high-growth emerging markets. The organisation will generate synergies from shared resources such as warehousing, distribution, printing and central functions. Pearson and Bertelsmann intend that the combined organisation’s level of organic investment in authors and new product models will exceed the total investment of Penguin and Random House as independent publishing houses.
The Penguin Random House board will comprise:
- John Makinson - Chairman, Penguin Random House
- Markus Dohle - Chief Executive Officer, Penguin Random House
- Coram Williams - Chief Financial Officer, Penguin Random House
- John Fallon - Chief Executive Officer, Pearson
- Philip Hoffman - EVP Corporate Finance & Strategy, Pearson
- Dr. Thomas Rabe - Chairman and Chief Executive Officer, Bertelsmann
- Dr. Judith Hartmann - Chief Financial Officer, Bertelsmann
- Dr. Thomas Hesse - President Corporate Development and New Business, Bertelsmann
- Gail Rebuck - Member of the Bertelsmann Group Management Committee
Bertelsmann owns 53% of the joint venture and Pearson owns 47%. The joint venture excludes Bertelsmann’s trade publishing business in Germany and Pearson retains certain exclusive rights to use the Penguin brand in education markets worldwide. In 2012, Penguin Random House had pro forma revenues of £2.6bn (€3.2bn) and operating profit of £346m (€427m). Penguin reported revenues of £1.1bn and operating profit of £98m with total assets of £1.2bn. After completion, Pearson will report its 47% share of profit after tax from the joint venture as an associate in its consolidated income statement from 1 July 2013. Pearson will report interim results on 26 July 2013 and will provide more financial information on the transaction.
As previously indicated, John Makinson is today stepping down from the Pearson board to assume his full-time responsibilities as Chairman of Penguin Random House.
John Fallon, Chief Executive of Pearson, said: “Penguin has been at the heart of Pearson for more than four decades and is deeply intertwined with our culture and operations. This combination creates a clear world leader with a strong platform for continued creative and commercial success in a rapidly-changing consumer publishing industry. This will be an excellent business and we will be active long-term partners in it.”
Thomas Rabe, Chairman and CEO of Bertelsmann, said: “With today’s launch of Penguin Random House, Bertelsmann and Pearson have set a great course for the future of the book, and book publishing – and new growth for Bertelsmann. Together, we can and will invest on a much larger scale than separately in diverse content, author development and support, the publishing talent, the entire spectrum of physical and digital book acquisitions, production, marketing, and distribution, and also in fast-growing markets of the future.”
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